chapter 1

Question 1

success in business is based on

Answer 1

1. Filling a gap in the market
2. Finding what customers need and want
3. solving a consumer problem
4. constantly adapting to changes in the market

Question 2

types of needs

Answer 2

1. social
2. physical
3. individual

Question 3

what are wants

Answer 3

they are shaped by one’s society and described as objects that will satisfy needs

Question 4

what are demands

Answer 4

wants that are backed up by buying power

Question 5

what is a business?

Answer 5

any activity that provides goods and services while generating profit

Question 6

what are goods

Answer 6

tangible products

Question 7

what are services

Answer 7

intangible products

Question 8

important
Purpose of a business

Answer 8

underlying reason for it’s existence

Question 9

important
the function of a business

Answer 9

activities and operations a business performs to fulfill it’s purpose and achieve it’s goals

Question 10

what is revenue

Answer 10

total amount of money a business takes in during a given period by selling goods and services

Question 11

what is profit

Answer 11

the amount of money a business earns above and beyond what is spent on expenses

Question 12

what is a loss?

Answer 12

when a business’ expenses are higher than revenue

Question 13

what is an entrepreneur?

Answer 13

a person who risks time and money to start and manage a business

Question 14

example of an entrepreneur, what does he believe in

Answer 14

bill gates, unhappy customers are his greatest asset and greatest source of learning

Question 15

key characteristics of an entrepreneur

Answer 15

1.passionate
2.determined
3.resourceful
4.risk taker

Question 16

advantages of becoming an entrepreneur

Answer 16

1. create your own destiny
2. become financially stable
3. become recognized

Question 17

disadvantages of becoming an entrepreneur

Answer 17

1. uncertainty of income
2. risk of losing all invested capital
3. long hours of work

Question 18

important
define competitive advantage

Answer 18

unique strengths that differentiate a business from it’s competitors and help them outperform them

Question 19

important
competitive advantage is based on

Answer 19

1. cost leadership
   2.product differentiation
2. Superior customer service
   4.advanced technology

Question 20

important
what is a value proposition

Answer 20

statement or purpose that communicates the unique values and benefits of a product or service

Question 21

important
importance of a value proposition

Answer 21

1. capture customer attention
2. defines why customers should choose a particular product over alternatives in the market

Question 22

important
difference between a value proposition and a competitive advantage

Answer 22

1. value proposition is more specific and customer-oriented, while competitive advantage is more broader and includes all the factors that make a business more competitive
2. The value proposition focuses on the unique values and benefits of a product or service, while competitive advantage focuses on internal resources such as market positioning, strategies, and capabilities

Question 23

define the standard of living

Answer 23

the amount of goods and services people can buy with the money they have

Question 24

define the quality of life

Answer 24

general well-being of a society in terms of political freedom, education, and healthcare, which adds to the joy that other goods and services provide

Question 25

define stakeholder

Answer 25

all the people who stand to gain or lose from business activity

Question 26

examples of internal stakeholders

Answer 26

1. stockholders 2.employees 3. board members

Question 27

examples of external stakeholders

Answer 27

1. suppliers 2. customers 3. general public 4. government

Question 28

what is a non-profit organization?

Answer 28

an organization whose goals aren't generating profit, they use financial gains to meet social or educational goals, they usually rely on donations

Question 29

what is outsourcing

Answer 29

an agreement in which one company hires another company to be responsible for an internal activity

Question 30

what are the 5 factors of production?

Answer 30

1. land 2. labor 3. capital 4. enterprise 5. knowledge

Question 31

what is land

Answer 31

natural resources

Question 32

what is labor

Answer 32

workers

Question 33

what is capital

Answer 33

finance and machinery

Question 34

what is enterprise

Answer 34

risk-taking ability

Question 35

what is knowledge

Answer 35

determining wants and needs, respond with desired goods and services

Question 36

how technology benefits workers

Answer 36

1. effectiveness 2. efficiency 3.productivity 4. e-commerce

Question 37

define effectiveness

Answer 37

producing the desired results

Question 38

define efficiency

Answer 38

producing goods and services using the least amount of resources

Question 39

define productivity

Answer 39

amount of output you generate, given the amount of input

Question 40

define e-commerce

Answer 40

buying and selling goods over the internet

Question 41

important how to compete by exceeding customer expectations

Answer 41

companies must listen to customers, and adjust their products to meet demand

Question 42

important how to compete by restructuring and empowerment

Answer 42

giving frontline workers the authority and training to respond quickly to customers

Question 43

important what is sustainability

Answer 43

actions through which humankind avoid the depletion of natural resources, and try to keep an ecological balance

Question 44

important example of sustainability

Answer 44

a japanese company produced pencils that end with a seed

Question 45

important example of value proposition

Answer 45

McDonald's value proposition includes convenience, affordability, and fast service